Strong Breakthrough - Masan Group

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BANKING SERVICES (continued) BANKING SERVICES (continued) Along with the Bank’s growth in size and sales force, the enterprise customer base of Techcombank has sharply increased over the years and surged in 2010. On that basis, Techcombank has determined in its customer strategy that small and medium enterprises are the core target market, while large enterprises are the niche market to be conquered and the milestone to affirm the Bank’s capacity as well as reputation in the market. In consultation with McKinsey, Techcombank established the Small and Medium Enterprises Division (SME) and Corporate Banking Division (CB) at the end of 2009 for the purpose of specializing banking service and activities based on target customers. That move pushed performance in 2010 with the enterprise customer base of Techcombank jumping from 38,500 at the end of 2009 to 45,252 as of 31 December 2010. At present, Techcombank is the leading bank in this customer segment and serves about 10% of total active enterprises in Vietnam. RAPID AND SUSTAINABLE DEVELOPMENT Portfolio Management Report: This report helps determine the performance and risk level of each business industry as well as business performance fluctuation pattern of each industry within a certain period. It also provides an overview of loan category switching in each industry and geographical area, etc. The tool also helps the Bank’s management proactively identify consistent business directions for the whole system and for each business unit. HIGHLIGHTS OF BREAKTHROUGHS Outstanding customer base Year 2006 2007 2008 2009 2010 Number of customers 10,289 13,541 26,026 38,500 45,252 According to statistics released at the end of 2010, SME accounted for 98% of total enterprises with total registered capital of VND 2,313,857 billion, contributing over 40% to national GDP. In 2010, in line with the Government’s policy, the Bank’s main focus of enterprise loans was the manufacturing industry, and loans outstanding reached VND 19,706 billion. VND 19,706 billion In 2010, besides finalizing the organizational structure of each division, Techcombank focused on completing the standard customer service process. Specifically, Techcombank set up sales seminars and distribution channels which were both specialized and synchronized in all stages, from product design to market feedback collection. This will enable the Bank to adjust newly developed products and services and develop business plans suitable to market conditions in different regions and areas. These factors brought about a huge change in business activities, specifically, RM’s sales performance increased twofold compared with the beginning of the year, thus consolidating the capabilities of Techcombank and ensuring better business performance in the future. The rapid increase in the number of enterprise customers was a monumental success of Techcombank in 2010. However, in the instability of the post-crisis business environment, enterprise loans would have potentially turned into bad debts had risk management and customer assessment process not been carried out carefully. Therefore, last year, along with the increase in customer base and customer service improvements, special attention was paid to risk management with the implementation of major tools as follows: Enterprise Risk Assessment Model (ERAM): With this model, enterprise customers are rated according to several qualitative criteria along with regular quantitative factors, enabling a more accurate assessment of the enterprise credit rating, thus improving the efficiency of credit risk control in Techcombank. Enterprise Content Management (ECM): With a modern technological base, Techcombank successfully implemented this automatic process for transferring credit documentation from branches to approval levels. This is an important factor that helps to narrow the geographical distance between the locations of documentation and approval units centralized in the Head Office, and provides support to secure and manage the documents, professionally monitor Services Level Agreement (SLA), shorten credit approval period, and respond to customer’s increasing demands. Early Warning System (EWS): Launched in 2010, this system is currently an effective tool for Techcombank to detect early potentially risky loans when they are still tier 1 debts, enabling the Bank to take immediate measures and improve control for the Bank’s credit quality. Along with the Bank’s growth in size and sales force, the enterprise customer base of Techcombank has sharply increased over the years and surged in 2010. This is a confirmation of Techcombank’s choice of target markets, its sales force development, as well as its ability to meet diverse demands for banking services of Vietnamese enterprises. Major contribution to loans outstanding In anticipation of the usual difficulties in the macro-economic environment, Techcombank determined that credit growth should be curbed and risks closely controlled. However, enterprise loans still played an important role and accounted for 65.1% of total loans outstanding in the whole system. In particular, the Bank’s loans outstanding structure was adjusted with proper focus on SME customers. In 2010, SME Division achieved the loans outstanding growth rate of 27%, which accounted for 91.1% of loans outstanding in enterprise customer segment compared with 79.9% in 2009 Customer segment 2009 2010 Growth rate Enterprise total (VND billion) 30,824 34,307 11% Small and medium enterprises 24,653 31,256 27% Corporate 6,172 3,051 -51% Reasonable lending structure With a nationwide network, enterprise banking activities of Techcombank covered most business and manufacturing industries in the economy. In 2010, in line with the Government’s policy, the Bank’s the main focus of enterprise loans was the manufacturing industry, and loans outstanding reached VND 19,706 billion and accounted for 57.44% of the Bank’s enterprise loans outstanding, followed by agriculture, forestry, fishery, services, etc. The enterprise customer base of Techcombank as of 31 December 2010. 45,252 Annual Report 2010 40 Annual Report 2010 41
BANKING SERVICES (continued) BANKING SERVICES (continued) Enterprise loans Balance Proportion Total (VND billion) 34,307 100% Manufacturing industry 19,706 57% Agriculture, forestry, and fishery 5,389 16% Service industry 3,337 10% Construction industry 3,891 11% Real estate businesses 773 2% Other industries 1,210 4% Encouraging deposit growth The rapid increase in customer base allowed Techcombank to substantially increase revenue from other services apart from traditional services, such as deposits and loans. Techcombank has acquired a well-deserved reputation and position in the business community with overall enterprise deposit growth rate of 11% in 2010. In particular, the SME Division posted a deposit growth rate of 32% over 2009. Detailed data on deposits by customer segments for the past 2 years are as follows Customer segment 2009 2010 Growth rate Enterprise total (VND billion) 21,115 23,399 11% Small and medium enterprises 14,637 19,376 32% Corporate 6,478 4,023 -38% Credit fee income on the rise The rapid increase in customer base allowed Techombank to substantially increase income from other services apart from traditional services, such as deposits and loans. In 2010, Techcombank continued to set itself as the leading bank in international payment services and trade financing in Vietnam with total payment volume of VND 5.5 billion, up 43.9% against 2009. In 2010, guarantee service achieved considerable growth with a 22.6% increase in guarantee balance compared with 2009. With the foundation built in 2010 and specific, detailed action plans in place from the beginning of 2011, a stronger focus on service quality and operational process improvement, and the advantage of the existing specialized products through R&D, Techcombank is one huge step closer to creating differentiated service value for each enterprise customer segment, enabling the Bank to realize its business targets in 2011 and the coming years. Leveraging firstmover advantage; reshaping the cash management and trade finance market. TRANSACTION BANKING On the roadmap to becoming a leading bank of Vietnam, Techcombank has implemented strategic transformation and organizational restructuring, and as a result the Transaction Banking Division was established as one of the three major business categories to drive Techcombank’s leadership ambition. Annual Report 2010 42 Annual Report 2010 43
Page 1 and 2: ANNUAL REPORT 2010 www.techcombank.
Page 3 and 4: Vision Techcombank aspires to be th
Page 5 and 6: MESSAGE FROM THE CHAIRMAN MESSAGE F
Page 7 and 8: ORGANIZATIONAL STRUCTURE ORGANIZATI
Page 9 and 10: SUPERVISORY BOARD NOMINATION AND RE
Page 11 and 12: THE BOARD OF MANAGEMENT 7. Mr. Phan
Page 13 and 14: 10 HIGHLIGHTS OF 2010 ACHIEVEMENTS
Page 15 and 16: AWARDS & ACCOLADES AWARDS & ACCOLAD
Page 17 and 18: OPERATIONS REVIEW 2010 (continued)
Page 19 and 20: BANKING SERVICES BANKING SERVICES I
Page 21: BANKING SERVICES (continued) BANKIN
Page 25 and 26: RISK MANAGEMENT RISK MANAGEMENT (co
Page 27 and 28: CORPORATE SOCIAL RESPONSIBILITIES C
Page 29 and 30: CONSOLIDATED FINANCIAL STATEMENTS C
Page 31 and 32: CONSOLIDATED BALANCE SHEET (continu
Page 33 and 34: CONSOLIDATED STATEMENT OF CASH FLOW
Page 35 and 36: NOTES TO THE CONSOLIDATED FINANCIAL
Page 51: EXPERIENCING THE CONVENIENCE Expand

Strong Breakthrough - Masan Group

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